Kentucky Wildcat Basketball: Insurance on Amateur Athletes

Jul 23, 2013; Philadelphia, PA, USA; First round draft pick center Nerlens Noel addresses the media as 76ers general manager Sam Hinkie listens during a press conference at PCOM. Mandatory Credit: Howard Smith-USA TODAY Sports

Imagine, you’re a star athlete at the top of your game. You’re projected to be a 1st round draft pick in the NFL or NBA. Your future stands bright before you, just out of reach.

You go out to play an NCAA game, one you’re forced to do – well, it was that or Europe – at least one year (NBA) if not two (NFL).

Halfway through the season, that bright future becomes overcast by injury. A torn knee ligament while playing for the team in which you helped make money (season tickets, ad-revenue, merchandise, etc) but didn’t see a dime other than that ‘free’ degree you had no intention of completing at the moment.

“Don’t worry, your coach says, you have insurance.”

That’s right, you took out a loan of $40,000 to cover insurance in the case your career was over. It’ll pay out $5 million dollars, assuming you took out the maximum but if you take the payout, you’ll never be able to play again.

It is a hard rehab ahead. One full of sweat, tears and doubt. The doubt that will undoubtedly seep into the minds of scouts.

“His knee isn’t looking good” says one. “It’ll never be the same” says another, no matter how you’re progressing. These are scouts, not doctors, but they’re the ones that have the ears of GMs and owners.

You were projected to be a mid-to-late first rounder, now you could slip to late first round but more likely early second.

You were guaranteed contract before that ACL tear when you’d have been drafted in the first. Guaranteed to make a minimum $1.7 million and if you worked hard and made it to your second contract another $3 million. If you made it to year 6, the average NBA career, you’d have collected close to $7 million dollars total.

You’re now going to the 2nd round. Where, if you’re lucky, you get on with a team after playing in their D-league for a while. You have no guaranteed money. No guaranteed career.

So do you take your $5 million pay out and walk away from the thing you’ve worked so hard at your entire, short lived 18 year life? One in which you could’ve like earned 50% more.. Or do you chance it and set upon the hard road of proving everyone else wrong?

“Oh dont worry”, some says.

“There is loss of value insurance. You can get paid for the slippage in draft picks.”

They are absolutely correct, there is that insurance. The NCAA offers the NCAA’s Exceptional Student-Athlete Disability Insurance Program (ESDI). A program that covers career ending injuries. A program the NCAA lets you, the 18-21 year old student, take upwards of $40,000 out on loan to pay for. You know, that $40,000 loan you can pay off using your $0/year salary.

Want more insurance or just some insurance on potential draft slippage? More good news: The NCAA lets you also take out insurance on your loss in value. Slip from #1 overall pick to #6, costing you nearly $10 million dollars in your rooke contract and you’ll see a big pay day. If you have the $20,000-$50,000 cash to pay for the insurance.

See, while the NCAA will let you take a career ending injury loan, a loan for loss of value is a violation of rules as it is an extra benefit and impermissable by the NCAA, so you need cash. But it is cool. You’re not allowed to work, and you make $0/year in the student-athlete profession, you are surely able to come up with the $20,000-50,000 in cash right?

Just another case of NCAA protecting the interest of the student-athelete or just another case of NCAA Amateur Hour.